In other words, as the skinhead says in Repo Man, "I blame...society..."

This kind of unrealistic delusional thinking is crucial in making sure that an eventual panic hits. It happened last time, and it seems to be developing again.

Which brings me to the next most obvious similarity: both Russian collapses begin with a worldwide selloff in emerging markets assets. Then, as now, Russia's stock market is largely controlled by short-term speculators -- mostly foreign hedge funds as well as local day traders and corrupt inside traders. Not a lot's changed in 10 years, except for volumes.

"The rapid rise of domestic stocks in the last year and a half has been due to major inflows of funds from abroad -- money from foreign banks, pension funds, and life insurance funds, [financial markets watchdog Oleg] Vyugin said." (2006)

Now those funds are fleeing. Which is exactly what happened the last time around. Never mind whether Russia "deserves" it; if the market is controlled by speculators, and a worldwide panic causes the speculators to pull out, the market will tank. That's all the fundamentals you need.

In retrospect, the financial crises that ripped through emerging markets in the late 1990s appear inevitable and obvious. So does the bursting of the NASDAQ/dot-com bubble in 2000. But right up to the day of the Asian/Russian collapses, no one expected them, and no one understood them, because the circumstances, and in particular the terminology, had not yet been incorporated into popular financial-crisis discourse.

So what is happening globally this time? What's the word that everyone's going to "get" this time around, just as the last time around words like "debt burden" went from being vague economics terms to obvious explanations for why those markets collapsed.

Last time it was a debt bubble. This time it's a credit bubble. What that means is that since 2000-1, when the US markets crashed and the economy headed into a recession, the US Central Bank pumped shitloads of money (liquidity) via ridiculously low interest rates. This meant that people had not so much "more money" as "easy-to-access" money which they used to buy houses. All that easy money meant housing prices soared for five years straight, to levels unprecedented when compared to the average Joe's stagnating income. However, all the Joes who owned houses saw their asset prices soar, much like those who held NASDAQ stocks in the 90s saw their stock portfolios soar, and that meant more money to spend on everything from plasma TVs to hybrid SUVs, liposuctions surgeries and everything else sold on credit. The US government worked the same voodoo on its budget -- massively increasing spending while at the same time cutting tax revenues. In other words, offering easy, free money to itself.

This easy money, and easy credit, is even easier in other parts of the world. China has seen its money supply grow 20% over the last year, and credit growth has soared 30% in India. The same has been happening in Europe, Japan, and of course Russia, where Russians are offered easy loans to "purchase" everything from vacations in Turkey to crap apartments in podmoskovie.

While in the last crisis, emerging market economies like Russia were forced to issue bonds at increasingly high interest rates in order to finance other high-interest-rate bonds they couldn't pay off, this time around, thanks to all the easy money and the weak dollar, yields on emerging market bonds are illogically low, approaching developed economy bond yields. Meantime, junk bonds issuance is at its highest rate since the 1999 speculative peak. Mergers and acquisitions are bursting all records. Much of this is financed by debt, and all kinds of popular, profitable debt schemes like repos, credit swaps, and all sorts of "esoteric" debt products and instruments.

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